U.S. Restricts High-end Chip Export to China

The U.S. Government restricted chip manufacturers Nvidia and AMD from exporting their high-end artificial intelligence chips to China. Nvidia said on Wednesday that Chinese customers would be banned from buying its A100 and H100 high-end chips. These chipsets power data centers used for Machine Learning, Artificial Intelligence, and high-performance computing. The U.S. Government told Nvidia that the new export restriction would ensure that these advanced chipsets are not used in any Chinese military equipment. The further limitation could affect Chinese firms’ ability to carry out advanced A.I. work like image recognition and impede technological advances in other industries.

When Nvidia and AMD announced their decision to stop exporting chips to China, the company’s shares fell 6.5% and 3.7%, respectively. Nvidia said it could lose up to $400 million in sales from China in the current quarter, and on the other hand, AMD said the ban would not cause a material impact on its business.

However, the U.S. Government did not formally announce the new restriction. A U.S. spokesperson for the Commerce Department said, “The U.S. Government is preventing Communist China’s acquisition and use of U.S. technology in the context of its military-civil fusion program to fuel its military modernization efforts, conduct human rights abuses, and enable other malign activities.”

In addition to China, the U.S. Government restricted high-end chip exports to Hong Kong and Russia.